Airports Company South Africa has reported that its profits declined by 58.9% to R227m in the 2018/19 financial year, as a result of the weaker domestic economy.
A key operational challenge during the year was overcoming the delay in the roll-out of airport capacity expansion projects. Currently, capacity constraints are mostly felt at Cape Town International Airport and OR Tambo International Airport, says the acting ceo of Acsa, Bongiwe Mbomvu.
Bongiwe says South Africa’s weak economy affected passenger numbers and the viability of some local airlines, resulting in revenue from commercial activities being affected.
She says Acsa also experienced significant cost pressures, specifically in relation to security services, which rose by more than 50% as a result of regulatory amendments and heightened security measures that were implemented during the year.
“Such a major reduction in profit is very disappointing as much of our increase to reported costs had a direct impact on our bottom line,” Bongiwe says.
“However, key positives remain. We have now produced a profit in all but one of the 26 years since the company was formed. We also received an unqualified audit and are proud of our record as a well-run state-owned company that has never needed government support or guarantees.”
Despite declining profits, Acsa reported a 5.6% increase in revenue to R7,1bn for the year ending March 31, 2019.
Acsa also managed to reduce its overall debt to R6,6bn, having paid back R2,3bn for this year.
Bongiwe has a positive outlook for Acsa in the short and medium term. “We are filled with optimism for the modern, digitally driven airport business we are developing and the important transformative role we can play in South Africa,” she says.
“While we have faced challenges when it comes to dealing with reduced tariffs affecting our aeronautical revenue, attrition in the global airline industry and a tough global economic backdrop, we enter 2020 with a balance sheet that is in good shape and with confidence in our operating model, our global opportunities, our reputation and our capabilities.”
